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Riverfront ruling rethought

| Wednesday, Sept. 22, 2004

GREENSBURG - A Westmoreland County judge has rethought his decision to hold a Rostraver Township business responsible for payments in lieu of taxes to the Monessen School District - related to a riverfront business site.

In fact, Common Pleas Judge William J. Ober wants the matter - which has moved on to the state Superior Court in the form of an appeal of the jurist's original ruling -...to be placed back before him....

Ober ruled Aug. 4 after a summary hearing that the district was entitled to money in lieu of taxes from Farnham and Pfile Inc.

In an opinion rendered Thursday, Ober indicated that it is not clear that Farnham and Pfile is responsible to make the payments. He noted that further review is necessary.

The district sued Farnham and Pfile, Westmoreland County, the Westmoreland County Redevelopment Authority, and the Westmoreland County Industrial Development Corp. over a financial dispute related to the riverfront property.

The City of Monessen originally was party to the suit, but dropped out.

The school district contends it is entitled - according to an agreement created by the county in 1998 - to 40-cents per square foot per year for the property, of which Farnham and Pfile took control in June 2001.

The 131,782 square-foot parcel is located in a Keystone Opportunity Zone site that the county owns in the city's Riverfront Industrial Park.

Farnham's attorney, Mark E. Ulven, of Pittsburgh, argued in court that Farnham and Pfile should not have to pay because the business is leasing properties at the industrial park, not operating them.

After the summary hearing, Ober ruled that Farnham and Pfile "benefits from the Keystone Opportunity Zone either directly or through its tenants."

Ober ordered Farnham and Pfile to pay the school district the 40-cents per square foot fee from the day of purchase until the KOZ benefits expire in 2010.

School district Business Manager Rich Fantauzzi previously said that from the purchase date to the end of the current fiscal year, June 30, 2005, Farnham and Pfile would owe the district approximately $115,187.

Farnham appealed the summary ruling and contended that the IDC agreement and property deed were not thoroughly reviewed before Ober made his summary decision.

He also filed a complaint in opposition to Ober's summary ruling.

By that time, though, Farnham and Pfile had appealed the ruling to the state Superior Court.

After a further review of the documents, Ober wrote:

"It is not clear from the documents that the parties intended Farnham and Pfile to make (payments in lieu of taxes).

" ... The court concludes that summary judgment should not have been made in this matter ... the case should be remanded to this court for further proceedings."

Ober wrote that he continues to believe that Farnham and Pfile's Monessen operation is a business that benefits from KOZ perks.

The judge ruled in his summary judgment that Farnham and Pfile has conducted business in the Monessen KOZ and that the state Department of Community Affairs granted the business KOZ certification for 2001, 2002 and 2003.

However, Ulven said Farnham could still win the case if the court determines the IDC is solely responsible for the payments in lieu of taxes.

"The problem is the 1998 agreement between all the local authorities says that the IDC is the one that's going to make the payments," Ulven said. "The question is whether or not they intended for someone purchasing the property to take over the IDC's payments."

School district attorney M. Janet Burkardt, of Pittsburgh, agreed the matter should be evaluated further.

"I think that is an issue that probably was not addressed in the initial argument but was raised in the brief," she said of unclear wording in the KOZ agreement.

The case will either proceed to the Superior Court or will be heard at trial before Ober.

In the wake of Ober's latest opinion, jurisdiction in the matter has yet to be determined.

Farnham restated that the lawsuit has created a rift between his business and the school district, to which he has previously directed state tax dollars.

Farnham said he would withhold donations to the school district as the litigation continues.

He said the district would have received a $60,000 donation from Farnham and Pfile this year.

"They're the ones that said we're the enemies," he said of the school district. "They're the ones that created this situation, and we will defend ourselves 1,000 percent.

"Everything is back on course, and we look forward to our day in court."

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